The Financial Markets Authority (FMA) has released a consultation paper on two proposed standard conditions it is considering imposing on transitional licensees under the new financial advice regime.
Under the new regime, all providers of regulated financial advice to retail clients will need a financial advice provider (FAP) licence. Those who intend to provide such advice during the two-year transition period under a transitional licence will need to comply with these standard conditions. Now, law firm MinterEllisonRuddWatts has outlined the proposed standard conditions as follows:
The first standard condition proposes that FAPs under transitional licences must maintain adequate written records in relation to their financial advice services. These should be held for at least seven years and cover how the FAP, or any persons engaged by them to give regulated financial advice to retail clients, has complied with the Financial Markets Conduct Act 2013, the Financial Markets Conduct Regulations 2014, and the Code of Professional Conduct for Financial Advice Services (the Code).
The other standard condition proposed by the consultation papers is that FAPs under transitional licences must have an internal process for resolving complaints from clients in relation to their financial advice services. In particular, such processes should provide for:
- Retail clients to be given information about the process;
- Complaints to be acknowledged as soon as is practicable;
- Complaints to be resolved and a response given to the complainant as soon as is practicable; and
- Written records to be kept of all complaints and the actions taken to resolve them.
MinterEllisonRuddWatts expects these standard conditions would also apply to full licences. Submissions close on July 26.